Indian Prime Minister Narendra Modi is on a 2-day visit to Japan. He will hold summit talks with Prime Minister Shigeru Ishiba and strengthen civilisational bonds, cultural ties, and economic partnership between the two countries.
While India has surpassed Japan in May 2025 in terms of nominal GDP (Gross Domestic Product) to become the fourth largest economy in the world, it tends to gain immensely from the East Asian nation through manufacturing, technology, investments, and human resource collaboration.
Our partnership with Japan is not just shaping industries but the livelihoods of farmers, students and entrepreneurs.
Japanese investment in India continues to grow
Over the past 2 years, India has witnessed a steady inflow of Japanese investments. This showcases their confidence in our growth trajectory.
According to reports, more than 170 Memorandums of Understanding (MoUs) valued at over $13 billion have been signed across multiple sectors between India and Japan.
For instance, Nippon Steel is expanding its footprint with projects in Gujarat and Andhra Pradesh. It includes a large integrated steel plant worth ₹56 billion, which will strengthen India’s manufacturing capabilities.
JFE Steel has announced ₹445 billion for electrical steel production, which is vital for India’s growing power sector. These projects are not only adding capacity but also creating thousands of new jobs.
Japanese automobile giants are equally committed to India’s growth. Suzuki Motor is setting up a massive new plant in Gujarat worth ₹350 billion and expanding production lines.
Similarly, Toyota Kirloskar is investing in both Karnataka (₹33 billion) and Maharashtra (₹200 billion) to ramp up hybrid and electric vehicle production.
These investments are positioning India as a future hub for clean mobility and catering to both domestic demand and exports.
Beyond manufacturing, Japanese firms are also venturing into real estate, renewables, and aerospace. Sumitomo Realty has pledged $ 4.76 billion in urban development.
Similarly, Osaka Gas is focusing on renewable energy and green hydrogen. Astroscale, on the other hand, will work with ISRO to launch satellites using India’s PSLV.
Indian SMEs entering global value chains due to partnership with Japan
A transformative feature of the India–Japan partnership is its impact on small and medium enterprises (also called SMEs).
For decades, Indian SMEs have faced challenges of restricted market reach and limited access to technology. Due to their partnership with Japanese firms, these enterprises are finally entering international supply chains.
Indian suppliers are being integrated into semiconductor ecosystems through partnerships with Tokyo Electron, Fujifilm, and Tata Electronics.
This not only brings India closer to the global chip industry but also ensures that local firms adopt world-class standards in quality control and production.
The automobile sector is also witnessing rapid SME integration. Both Toyota and Suzuki are extending their supplier networks to Tier-2 and Tier-3 Indian companies.
In the digital space, Fujitsu’s Global Capability Centre is hiring 9000 Indian engineers and creating business for IT-linked SMEs.
Due to this, Indian SMEs are increasingly gaining exposure to advanced practices, cutting-edge technologies and global markets. This is boosting India’s competitiveness on the world stage.
Japan and India cooperate to boost rural economy
India’s economic partnership with Japan is not limited to its urban industries. It is reaching deep into India’s rural economy.
For example, Sojitz Corporation is working with Indian Oil and investing $395 million in 30 plants that will utilise agricultural residues and produce 1.6 million tons of biogas annually.
This allows farmers to earn additional income by supplying crop waste. At the same time, they are contributing to the clean energy transition mission.
Suzuki Motor is collaborating with the National Dairy Development Board to convert cow dung into biogas and fuel CNG vehicles.
Since nearly 1/5th of India’s passenger car market runs on CNG, the project has massive opportunities for both energy independence and rural employment.
Japan-India partnership ensures increased manufacturing and exports
The partnership with Japan is also helping India transition from being a consumption-led economy to an export-driven one. It is reinforcing India’s position in global markets.
The new projects of Nippon Steel will strengthen India’s export capacity in speciality steels for automobiles and energy industries. Fujifilm & Tata are strengthening our position in global chip supply chains.
Toyota and Suzuki are producing hybrid and electric vehicles (EVs) in India. The goal has been to ship these cars to Africa, Southeast Asia and the Middle East. This aligns with India’s vision of ‘Make in India, Make for the World’.
HR and knowledge exchange between India and Japan
The most ambitious dimension of India–Japan cooperation lies in human capital.
The India–Japan Talent Bridge program is supported by Japan’s Ministry of Economy, Trade, and Industry (METI), which has a budget of ¥15 billion for skill and HR cooperation.
It seeks to facilitate talent exchange of 5 lakh students and professionals within 5 years through higher studies, internships and employment.
Major Indian universities such as IIT Kharagpur, IIT Kanpur, IIT Guwahati, IISc Bangalore and Anna University are hosting career fairs and exchange programs with Japanese institutions.
They are opening pathways for Indian students to engage with advanced Japanese research and technology firms. Japanese corporations are also actively recruiting Indian talent.
Nidec is establishing a software development center in Bengaluru. Musashi Seimitsu is developing EV components with Indian graduates. Dai-ichi Life Techno Cross is hiring bilingual engineers.
Fintech companies such as Money Forward are also drawing heavily on India’s IT workforce. Beyond corporate hiring, venture firms are funding Indian startups. This is especially true in deep-tech domains.
They are not just providing capital but also mentorship and research opportunities. It is significantly boosting India’s innovation ecosystem.
Through academic exchanges, corporate partnerships, and startup funding, India and Japan are nurturing a generation of professionals equipped to tackle the challenges of the future.
Collaboration on other fronts
A landmark Memorandum of Understanding (MoU) was signed between the Government of Assam and M/s ASEAN Holdings.
It supports India’s Act East Policy and focuses on industrial infrastructure, logistics and agro-based industries.
For Assam, this partnership implies jobs, development, and greater integration with ASEAN markets. India and Japan are aligning their cooperation with global priorities.
At the Japan–India–Africa Forum and the TICAD Summit, the two nations outlined a shared agenda of mineral security, semiconductor supply chains and clean energy resilience.
This global dimension ensures that India and Japan are shaping regional stability and connectivity. From Gujarat’s steel hubs to Banaskantha’s dairy farms, from Bengaluru’s IT corridors to Assam’s industrial gateways, the impact of Japanese cooperation is evident.
It is not merely a story of investments and trade. It is about reshaping livelihoods and futures.
As Prime Minister Modi and Prime Minister Ishiba meet in Tokyo, the India–Japan economic relationship is emerging as a defining partnership of the 21st century.
India brings scale, manpower and markets while Japan contributes technology, capital and expertise. Together, we are building global upply chains, fostering clean energy, empowering farmers and nurturing young talent.
The vision of ‘Make in India, Make for the World’ is being realised in real time in 2025.
